compare cost of a new client?

Discussion in 'Pesticide & Herbicide Application' started by Efficiency, Apr 10, 2012.

  1. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,569

    Just wondering if anyone keeps tabs on the cost of their new clients each year. We are doing much better than last year with our average sale increasing while also managing to acquire the client at a lower cost too.

    Our direct mail is actually the cheapest for us - our final numbers are not in yet as we just had another 10k pieces hit mailboxes monday. But, before any of those new clients dilute the pool, we are around $150 per new lawn app client.

    Where do you stand? What else do you have success with?
     
  2. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541


    Let's see...I dropped my $193/month yellow pages ad.(Nobody was looking at it except telemarketers) I'm having a website built -$500. I sent out referral discount coupons(with my prepay letters) I had printed last year and I've given out $750 in referral discounts. I've spent zero on post cards and I have 160 new customers...so far.

    What does that work out to?

    Referrals are my greatest help

    My case may be the "exception"...Although I always knew we provided exceptional service and it seems to be paying big dividends this year.

    It has been a "different" season so far. That's for sure.
     
  3. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,569

    Ted, truly, congrats! Thats awesome you are getting so many good referrals. We are pushing them too with (likely) the same coupons and they are starting to come in but not in the volume yours are. Good job!

    Everyone else, do you not know or dont care? If either is the case, I would argue you are not in business but rather just working your own job. This info is critical to your business' growth, profitability, and cashflow. Not sure why this isnt a fun topic.
     
  4. humble1

    humble1 LawnSite Silver Member
    from MA
    Posts: 2,499

    I get more closes on referals, most of our leads come in online, so our costs are that of website and pay per clicks. I like the referals but you aren't going to grow to 5000 accounts from referals.
    Posted via Mobile Device
     
  5. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    .


    This might be an interesting thread. Cost of acquiring customers vs Buying accounts should be also considered. In the past I bought mowing accounts at a lower than Pesticide account price and Up sold Pest Control, Landscaping and Irrigation etc. It worked for me because I was fortune enough to have Licenses in both Irrigation and Pesticide that others didn't have. I purchased good mowing accounts for 25% of a years gross. I also worked the deal where I mowed and they collected for 3 months or 25% of our year round season. Transfer of these accounts after 3 months of mowing them was 98% effective. While I accounted for a 10% loss of customers. I was lucky enough not to of lost any where near that percentage. Selling a mowing business in Florida can be hard because of the nonbusiness attitude of those in the Mowing business. Therefore as someone who was willing to buy accounts, I had my pick.

    Now I am Advertising to build my Fire Ant and Structural Pest Control side of my Business. This is a completely different approach than I have been use to. It is also a totally different market in fact I am now dealing with a More WORKING CLASS type customer. A lot more Tire Kicker and sale rejection than doing the more Up Scale Fine Lawn work. Also less desire for a contract type service and more interest in a one time shot.

    Cost of advertising is only 1/3 of the expense. Chasing sales lead in both TIME and Gasoline etc is costly. But also an intangible cost that is hard to figure.

    In building my Structural Pest Control Business, I am not buying accounts for several reasons. I would like to be able to hit the ground running by buying accounts. But they are not for sale because they are so easy and profitable. Plus the Big Boys are offering HUGE money for those accounts and driving the price up.

    Trying to building Structural Pest Control I have a Business plan and a Marketing Plan to get me there. I hope to discuss that plan or parts of it later in this thread depending on the other replies. But for now my typing finger is tired.
     
  6. n-green

    n-green LawnSite Senior Member
    Posts: 362

    If you take money spent on marketing and divide by new sales it costs me about $200 per. In the early 2000's it was about $100. Mostly direct mail. The longer I am around the more referrals and web-site sales I get, but that won't sustain much growth. Ted, how long have you been in business and what % of your base is 160? (if not too personal)
     
  7. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    I've been in business full time for 8 yrs. I live in a predominately rural area. I really don't see myself at 5000 customers and honestly, I don't think I would really want it. This has been an unusual year. I usually pick up 50-70 new customers a year. Thats plenty since I am small time and have 98% retention rate from year to year. This year I've picked up over twice what I normally do.160 is about 25% of what we take care of. Average lawn size is about 14k. I spend very little on advertising obviously but I have sustained steady growth each year, so I put the money that would have been spent on some more expensive forms of advertising back into the business in other areas. I'm no "shooting star" but I think we shine pretty bright in our customers eyes. I've got experienced help and we give personal service with attention to detail to our customers and they appreciate it by sending us more business. For me, things are going great.
     
  8. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,569

    thanks guys for sharing.
    n-green, sounds like we are both in the ballpark.

    Too bad more dont want to talk about this. Maybe one day...
     
  9. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,569

    Ric, not trying to call you out but since I gave up doing free lawn evaluations I have continued to close yet have not had to waste a single minute of time with these types.

    I supposed I dont know the intricacies of your specific area and the pest pressures there but I would have to think you can develop some equation to take into consideration all your cost drivers (linear feet, etc) for SPC and spit out a price, done just from your office.
     
  10. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    Good Topic. I wish I could contribute more. I had some luck with direct mail a few years ago. My website is organic, no ads.

    I lose a lot of leads just because I am so hands on.

    I have hired some more help so now I need to really push to cover.
     

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